A form of advance-fee fraud, the lottery scam is a fake lottery that promotes a prize to winners who must render payment to receive it. In many countries, lotteries are illegal except when run by the state or an exempt charity, and online lotteries are illegal almost everywhere. Scammers sometimes get information through contests people enter by filling out a slip or an online form. People may mistakenly believe they have won, when in reality they are simply lining the scammer's pocket.
Lottery scams typically occur through email spamming, but may also be through the mail or a telephone call. Scammers contact people and tell them they won a prize, either money or merchandise, from a fake company or promoter. Often victims don’t remember entering anything. Alternatively, they might have signed up for a door prize somewhere and think the lottery scam is related. The scammers ask for money, credit card, or other personal information to claim the prize.
There may be several communications before the scammers solicit the fee, or they may ask up front. They will claim the money is for taxes or transfer fees. The scammers may ask the victim to deduct the fee from a fraudulent check sent for the winnings and wire it back to them, which is a money laundering scheme. They tell the victim that once they send the fee or provide the information, the prize will arrive in cash by special courier.
Once they have the money or information, the lottery scam is complete and the prize is never sent. Personal information is valuable because the scammers can use it to open accounts in the victim’s name and purchase merchandise, take out loans, or even use the information as a false identification to commit crimes. Victims are left with creditor calls, police interrogations, and damaged credit. It can take years to sort out the problems left after identity theft.
Elderly people with mental health issues are particularly prone to the lottery scam. Those with relatives who they feel may become victims should monitor their mail and help them with computer and telephone security issues. Constant participation in this scam can wipe out years of savings or retirement income, leaving older victims without means of support. The stress from financial devastation due to a lottery scam can cause people to develop health problems or magnify existing ones.
A little education goes a long way in helping potential victims protect themselves from a lottery scam. Legitimate lotteries require the purchase of a ticket which winners take to the lottery office to verify. Winnings are never distributed in cash, and taxes don’t come due until after the winner has received prizes. Real sweepstakes never require a purchase to enter or win. In the United States, it is a federal crime to enter a foreign lottery.
To avoid a lottery scam, people should safeguard personal information and make sure computer security is up to date. Scammers harvest email addresses through spyware or use listings of telephone numbers, addresses, and other contact information found on the Internet. People should not click on links in emails from unknown addresses, and should not respond to communication from a stranger. Personal passwords should be updated regularly.